Grant Shapps is a very competent politician, he very media friendly and come across well. He’s definitely a high contender to replace David Cameron as leader of the conservatives but has he lost the plot with his latest housing policy?
Grant Shapps has announced that he wants councils to help elderly people to move out of their homes and into smaller property to release larger houses for families. The council will take on the role of letting agent and managing agent for the owners and the elderly owners will keep the rental income.
He seems to think that this will help to bring about more affordable family housing for young people who are desperately in need of it. But as with his declaration that people should live on houseboats and canal barges if they can not afford to live in a house – not a cheap alternative actually - he’s probably not thought this one through either.
Allowing elderly people to keep their homes and make rental income on it while they go and live in affordable property (presumably provided by council or housing associations) is not going to bring down house prices and rents. It’s going to make things worse because now the taxpayer is not subsidising one affordable home but two! Watch the housing benefit bill soar.
Grant Shapps is expecting the owners of the house to rent it out at affordable rent – how many home owners are going to be willing to rent their homes out at below market value? Presumably if the council is handling the management and rental of the property they will give the families on their housing waiting list first option on property. Families on the waiting list tend to require housing benefit to pay for their rent because they are excluded from the normal marketplace.
The public will fund this measure on two counts, the elderly will be given subsidised below market rental property while owning a home and the family moving in and paying rent – even if working – will still in many cases need housing benefit paid. So now the taxpayer is subsidising 2 families instead of one.
The simple fact is that if elderly people can not look after their homes and need to move then they need to sell up and give people who are desperate to buy a decent home an improved chance to buy one.
If elderly people need to move into a care home permanently then they should sell up their homes rather have the state manage it and rent it out for them. If they want to rent the house out then there are plenty of private estate agents there to do the job. It’s not the job of the tax payer to protect people inheritance or protect people’s assets.
If Grant Shapps really wants to provide homes for young people and families in this country then he will have to do want is needed to be done and commit to building 350,000 – 400,000 houses each year for the remaining lifetime of this government. Anything less and the problem will not go away. Anything less and the coalition are as bad as managing the economy as the Labour Party was.when they were in charge
House prices in relation to earning in the UK are way out of kilter when compared to most of the world and the reason why they are so high and remaining high in this depression is the lack of house building. House prices need to come down by at least 45% before the economy will start to grow again to any acceptable level. All you need to do is replace the shortage of gold in the Long Depression which lasted for over 40 year with the shortage of housing and you’ll see the similarities between now and the 1870′s and the Long Depression.
We have millions of people needing homes, we have millions of people jobless in the UK. There needs to be a way of bringing the resources of pension companies and big companies into play. In fact with the current abysmal rate of interest that savers are being paid at the moment there’s no reason why the state can not tap into the vast resource of personal savings.
If Grant Shapps is so keen on tackling the housing crisis then he should launch a National Building Bank in the same way the the Green Bank is being put together. People should be able to invest in the building bank to fund affordable housing and take a share of the rental profits. I would be happy to put my savings into a bank that invests in housing and plays safe giving a sustainable and steady if not exciting yield on my savings.
The reality is giving elderly home owners tax payer subsidised affordable housing is not going to have any impact on the housing crisis - only new build will do that – but it will add substantially to the affordable housing subsidies with much of it going to the wrong people and to people who do not need affordable homes.
Perhaps Grant Shapps is not such a shining light in the Conservative Party afterall – though he’s certainly out to please the ‘something for nothing’ baby boomer generation.
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